Asset Preservation Planning

Asset preservation planning is legal planning directed toward protecting your home, investments and other assets from being taken or used during your lifetime to pay for things that won’t benefit you or your family. It has traditionally been used by business owners and people with accumulated wealth to protect their assets against risks such as business failures, lawsuits and taxes. If you fit either of those descriptions, you should strongly consider developing an asset preservation plan.

More recently, asset preservation planning has found another use of tremendous importance to a far greater number of people, including “typical middle class” people as they age: protecting your property and savings from the potentially devastating impact of long-term care costs.

Even the best estate plan does nothing to assure that you will still have an estate left to distribute when you die. Its importance rests on the assumption that you will. The goal of asset preservation planning is to protect your estate against lifetime risks that threaten to render your estate plan essentially meaningless.

A number of social and economic factors have combined to establish an increased need for asset preservation planning to protect against long-term care costs. Life expectancies are increasing. The chances of needing long-term care later in life are growing. Alzheimer’s disease has been described as “the coming epidemic.” Meanwhile, the availability of family members to serve as home caregivers is becoming increasingly less prevalent. The cost of long-term care continues to increase dramatically and beyond the ability of retirement incomes to keep pace. The government, at both federal and state levels, has responded to the resulting strain on budgets by passing laws and regulations to make late-stage planning toward establishing eligibility for assistance to help pay for long-term care ever more difficult.

Estate planning has historically placed a substantial emphasis on dealing with the outside circumstance that has posed the greatest threat to our ability to leave an inheritance to our loved ones. Historically, for many people, that threat was estate taxes. But with the estate tax exemption amount having now been increased to over $11.7 million (single) / $23.4 million (married) for 2021, that threat has been eliminated for all but a fortunate few. Meanwhile, the projected cost of a five-year nursing home stay starting 20 years from now will approach, or even exceed, $1 million.

Long-term care costs are the new greatest threat to your ability to leave an inheritance for your loved ones. Establishing an asset protection plan can reduce or even eliminate that risk posed by that threat. It is the wisest and most important action you can take to guarantee that you won’t die flat broke or with a much smaller estate than you hoped and planned to leave for your loved ones.

For some people, especially those who are younger and whose health is reasonably good, an insurance-based approach can offer the best solution. But for many others, age and health concerns that raise insurability issues can rule out that option or make it cost-prohibitive. The good news is that legal planning toward protecting your life savings against the risk of being lost to long-term care costs is an option potentially available to everyone, regardless of their age, health or insurability.

It is a core principle of Better Estate Planning that your life savings should be protected against the risks that threaten your ability to leave an inheritance for your loved ones. We can help you develop an asset preservation plan by which you can guarantee that you will still have an estate left to distribute when you die.

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